Former President Barack Obama pointing to a bag of Kirkland Signature brand of tortilla chips.

source

AP/Charles Dharapak

Sales of Costco's
Kirkland
Signature private-label brand grew to $39 billion in 2018,
up from $35 billion the previous year, the retailer reported in
December.

That represents an increase of more than 10%, slightly
outpacing sales growth for the retailer as a whole.

Kirkland has become a golden asset in Costco's crown,
giving shoppers a unique reason to shop there over other
retailers - both online and off.

Costco
might not carry everything you want, but it's got what you need:
its Kirkland Signature private brand.

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In Costco's annual report released in December, the retailer
announced that sales of Costco's Kirkland Signature private-label
brand grew to $39 billion in 2018, up from $35 billion in 2017.
That's good for a sales growth rate of more than 10%, slightly
higher than the sales growth rate for all Costco merchandise. It
also means that Kirkland accounted for nearly a third of all
Costco's sales.

Customers see the brand as a blend of quality and value, and it
gives shoppers a unique reason to go to Costco that other
retailers can't match - online or off.

"Kirkland is a brand in its own right," Karen Short, a retail
analyst at Barclays,
told CNN. "It is one of the reasons people go to Costco.
That's not necessarily something you can say about many private
labels."

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But competing brands might see it as a threat. That could mean
lower prices for customers, as other brands position themselves
to better compete with Kirkland.

"When a traditional brand is losing shelf space or market share,
what do they do? They create a better value," Costco CFO Richard
Galanti
told CNN in an interview.

If Costco undercuts a brand it sells with a Kirkland item, it
often forces that brand to lower prices as well. It has happened
with Poland Spring water, when after Costco lowered the price of
the Kirkland 40-pack of water, Poland Spring reportedly also
lowered prices.